Chinese premier to visit UK as ties improve after Tibet rowBeijing (AFP) June 13, 2014 -
Chinese Premier Li Keqiang visits Britain next week, marking a further improvement of ties following a diplomatic freeze lasting more than a year due to Tibet-related tensions.

Li, the number two leader of China's ruling Communist Party, departs Beijing on Monday, the Chinese foreign ministry said. From Britain he travels on to Greece.

In London, he is expected to have a rare audience with Queen Elizabeth II and will hold a joint press conference with Prime Minister David Cameron, whose May 2012 private meeting with the Dalai Lama was strongly condemned by Beijing.

Li's trip to Britain is the first by a Chinese premier since his predecessor Wen Jiabao visited in 2011. The last Chinese president to go was Hu Jintao in 2005 whose visit was dogged by protests by pro-Tibet and human rights campaigners.

China's leaders reduced diplomatic contacts after Cameron's meeting with the exiled Tibetan spiritual leader whom Beijing characterises as a "political exile engaged in anti-China separatist activities in the name of religion".

The relationship began to thaw last June, when both countries' foreign ministers spoke by phone.

That paved the way for a visit last December by Cameron to Beijing, a trip billed as Britain's biggest ever trade mission to China.

Cameron worked hard to emphasis business ties rather than politics and human rights during the trip. Still, the resumption of regular human rights talks was touted as one of the key successes of Cameron's visit.

But as Sino-British relations have warmed, China's leaders have continued to react sharply to international criticism of their human rights record.

After Britain's Foreign and Commonwealth Office listed China as one of its 28 "Countries of Concern" in a human rights report, Beijing in April abruptly pulled out of scheduled talks, complaining that London had "slandered" China.

On Thursday, Chinese vice foreign minister Wang Chao defended the country's rights record, telling a briefing about Li's trip that "China has open communication channels with all countries, including the UK, on human rights".

After visiting Britain, Li travels to Greece, where he is scheduled to meet with Prime Minister Antonis Samaras and President Karolos Papoulias, before wrapping up his trip on June 21.

The countries will sign a joint declaration and a set of agreements and business contracts, Wang said.

Li and Samaras will also visit the container terminal at the port of Piraeus, which is operated by Chinese shipping giant COSCO.

"This is the first time for a Chinese company to obtain a long-term concession for a European port," Wang said.

"So, it is very significant," he added.

"Over the past four years, the operation of this port has been very good, and it has made good contributions to promoting the local economy and increasing employment."

The small- and mid-sized companies that form the backbone of the German economy are increasingly being snapped up by foreign -- and predominantly Chinese -- investors as the families that run them find no suitable heirs to pass their businesses on to.

Two years ago, engineering firm Putzmeister passed into Chinese hands after the founding family was unable to find a successor.

The takeover by Chinese giant Sany for around half a billion euros was one of the biggest investments by China in Europe at the time. But it was just the tip of the iceberg.

"Every private equity fund in the world currently has its eyes fixed on this market," the expert said.

"German firms, and particularly family-run ones, are the ideal takeover targets for Chinese investors at the moment," said Stefan Heidbreder, head of the federation of family-owned businesses.

- 'A different balance' -

Around 75 percent of so-called SMEs -- small and medium enterprises, or, to use the German term, "Mittelstand" -- are in family hands. Specialising in high-tech industrial applications, the sector is known for its innovation and is the driving force behind German exports.

But the tradition of succession where the father hands over the business to his son or daughter is crumbling.

Detlef Keese, of the Institute for SME Research at Mannheim University, estimates that fewer and fewer companies are remaining in family hands: the proportion has fallen from 70-75 percent in the 1990s to around 50 percent at present.

The German association of chambers of commerce and industry, DIHK, sees it as a reflection of the ageing population. But it is also a social phenomenon, it says.

"In a lot of cases, the children are reluctant to step in to their fathers' shoes, because they have seen what toll it has taken," said Arist von Schlippe, psychologist and lecturer in the management of family-run firms at the university of Witten.

"They have a different idea of life, they want a different balance," he said.

In addition, a lot of companies are in a phase "where it's not just entrepreneurial drive and spirit that is required, but also management competence, which the young people simply don't have, or which their fathers believe that they don't have," von Schlippe said.

The first wave of post-war entrepreneurs passed on the torch in the 1970s and now it is the grandchildren's turn, the expert said.

And in the case of those companies set up in eastern Germany after the fall of communism, it is the time for the first generational changeover.

- The Chinese pay well -

In the absence of a successor, it is sometimes the non-family management which takes over by way of a management buyout, with the financial backing, say, of a private equity fund.

But the investment funds themselves sometimes act on their own. And, in other cases, the company is simply snapped up by a rival.

From this point of view, Chinese investors can often appear to be the more attractive option. They are reliant on the current workforce and frequently hold on to the existing management teams, said Heidbreder.

Another attraction is that Chinese investors are more willing to pay higher prices, said Jens-Peter Otto, who heads the Chinese-German business group at PWC.

According to data compiled by EY, the volume of Chinese direct investment in Germany rose from 46 million euros to 68 million euros between 2012 and 2013.

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